I. Concept and Legal Framework

A Special Power of Attorney (SPA) is a written instrument by which a principal authorizes an agent (also called an attorney-in-fact) to perform specific acts on the principal’s behalf. In Philippine property transactions, the SPA is crucial whenever a person cannot personally sign documents for the sale, mortgage, lease, or other disposition of real property.

The main legal bases are:

Civil Code of the Philippines (on obligations and contracts, agency, sales, etc.);
Family Code (for transactions involving conjugal or community property);
Related statutes on public instruments, notarization, and land registration;
Jurisprudence clarifying form, scope, and effect of SPAs.

For real estate, the SPA is not just a formality; it often determines whether the transaction is valid, void, voidable, or unenforceable.

II. Agency and the Requirement of “Special” Authority

A. Agency in General

Agency is a contract whereby a person (agent) binds himself to render some service or do something in representation or on behalf of another (principal), with the latter’s consent.

Essential elements:

Consent of principal and agent;
Object – the act(s) the agent is empowered to perform;
Cause – representation and mutual agreement.

Agency may be express or implied, but for certain acts, the law insists that authority be special and in writing.

B. Acts Requiring Special Power of Attorney

Under the Civil Code, certain acts can only be validly performed by an agent if the authority is special and usually in writing, for example:

Sale of a piece of land or any interest therein through an agent – the authority must be in writing; otherwise, the sale is void.
Creation or conveyance of real rights over immovable property (e.g., mortgage, easement);
Leases for a period exceeding one year;
Compromises, novations, or other acts of strict dominion over property.

“Special” means:

The SPA must specifically describe the act (e.g., to sell, to mortgage, to lease, to donate), and
The SPA must identify the property or class of properties to be affected.

A broad clause like “to do all acts necessary in connection with my properties” is normally insufficient to authorize a sale of land; courts repeatedly insist on clear, specific wording.

III. Form and Formal Requirements

A. Writing and Public Instrument

For real property transactions:

The contract itself (e.g., Deed of Absolute Sale, Real Estate Mortgage) must generally be in writing to be enforceable, and in practice, to be accepted by the Register of Deeds.
When the contract is entered into through an agent, the agent’s authority (SPA) must likewise be in writing. For a sale of land, absence of written authority renders the sale void, not merely unenforceable.

While the Civil Code’s Statute of Frauds concerns enforceability, the specific rule on sale of land through an agent concerns validity itself.

B. Notarization

In real-world practice:

An SPA for property transactions is almost always notarized, converting it into a public document.
Notarization serves to:
- Authenticate the instrument;
- Give it evidentiary weight;
- Allow its use in transactions requiring public documents (e.g., registration of deeds, annotation on title).

Strictly speaking, the agency may be valid between principal and agent even if written in a private document, but:

For sale of land, the law requires written authority;
For binding third persons and for registration, a notarized SPA is practically indispensable.

C. Registration and Annotation

The SPA itself need not always be registered with the Register of Deeds to be valid, but:

For added protection, especially in substantial transactions, parties sometimes cause the SPA to be annotated on the title (TCT/CCT).
Some Register of Deeds offices require the presentation of the original notarized SPA (or consularized/apostilled SPA, if executed abroad) before registering the deed signed by the agent.

IV. Essential Contents of a Valid SPA for Property

A Special Power of Attorney for property transactions should clearly and precisely contain:

Identity and Capacity of the Principal and Agent
- Full names, civil status, citizenship, and addresses;
- Confirmation that both are of legal age and have capacity to contract.
Specific Grant of Authority
- Exact act(s) authorized: e.g.,
  - “To sell” (absolute or conditional sale);
  - “To mortgage” or “to constitute a real estate mortgage”;
  - “To lease” (specifying term);
  - “To donate” (donations require very explicit authority);
  - “To sign and execute” particular instruments (Deed of Sale, Deed of Mortgage, etc.).
- General empowerment clauses are insufficient for acts of strict dominion like sale, mortgage, or donation.
Description of the Property
- Technical description or at least:
  - Title number (TCT/CCT No. …);
  - Location (barangay, municipality/city, province);
  - Area and/or boundaries.
- If multiple properties, either list them or define a clearly identifiable group (“my properties under TCT Nos. …”).
Price, Terms, and Conditions (for Sale or Mortgage)
- Some SPAs specify:
  - Minimum sale price;
  - Terms (cash, installment, balance through financing);
  - Authority to receive earnest money, downpayments, and full payment.
- While not always required for validity, clear parameters prevent disputes on whether the agent exceeded his authority.
Powers Incidental to the Main Act Common supplemental clauses:
- To sign and acknowledge documents before a Notary Public;
- To receive and issue receipts for payments;
- To secure tax clearances, transfer tax payments, and deal with BIR, LGU, and Register of Deeds;
- To take delivery of new titles in buyer’s name or in principal’s name, as may be agreed.
Date and Place of Execution
- Important for determining priority and for issues of revocation and effectivity.
Signatures and Acknowledgment
- Signed by the principal in the presence of the notary (and witnesses where required);
- Notarial acknowledgment correctly indicating identity and competency of the principal.

V. SPAs Executed Abroad

Many Philippine property transactions involve principals residing or working abroad, especially OFWs.

A. Execution Before Philippine Consular Officials

Traditionally, an SPA executed abroad is:

Signed by the principal before a Philippine Embassy or Consulate, or
Notarized by the Consul, using consular forms.

Such SPAs are treated as public documents in the Philippines. They typically must be:

Brought home;
Presented (and often required in original) to the notary, buyer, and Register of Deeds.

B. Apostille / Foreign Notarial Acts

Where foreign notarizations or apostille systems are used:

The SPA is notarized by a local notary in the foreign country;
Then either:
- Authenticated/apostilled by the designated authority; or
- Otherwise processed in accordance with DFA and land registration practice.

The key legal point: the principal must personally appear before a competent official, and the SPA must be properly authenticated so Philippine authorities treat it as a valid public document.

C. Language and Translation

If the SPA is executed in a foreign language:

Translation into English or Filipino is often required;
A certified translation may be demanded by the Register of Deeds or courts if the instrument becomes evidence.

VI. Duration, Revocation, and Extinguishment of SPA

A. Duration

An SPA may:

Be open-ended (until revoked or until the object is accomplished);
Specify a definite period (e.g., valid for one year);
Be limited to a specific transaction or act (and deemed extinguished upon completion).

A “bare” SPA without a stated period is generally considered effective until revoked, or until extinguished by law.

B. Modes of Extinguishment of Agency (and SPA)

Under the Civil Code, agency is extinguished by:

Revocation by the principal;
Withdrawal by the agent;
Death, civil interdiction, insanity, or insolvency of the principal or agent;
Dissolution of the principal (if a corporation) or agent (if juridical);
Accomplishment of the object or expiration of the period;
Loss of the thing or completion of the business for which it was constituted.

Once agency is extinguished, the SPA automatically loses effect, though issues can arise regarding third parties without notice of revocation or death.

C. Revocation

The principal may revoke the SPA:

Expressly, through a new notarized Revocation of SPA;
Implicitly, by:
- Appointing a new agent for the same transaction inconsistent with the previous SPA;
- Personally undertaking the transaction in a way incompatible with the agent’s authority.

To protect both the principal and third parties:

Revocation is usually in writing and notarized;
Notice is given to:
- The agent;
- Known third parties dealing with the agent (e.g., buyer, bank);
- Sometimes, through publication or registration/annotation.

If third parties deal with the agent in good faith and without notice of revocation, courts may protect them in certain circumstances, but the general rule is that agency ends with revocation or death.

D. Effect of Death of Principal or Agent

As a rule:

Death of the principal extinguishes the agency;
Acts done by the agent after learning of the death are void as against the principal’s estate.

The Civil Code, however, also recognizes situations where:

For the protection of third parties in good faith, the acts may bind the estate if:
- Third parties were in good faith and unaware of the death; and
- The agency was meant to continue in the interest of such third parties.

VII. Defective SPAs and Consequences for Property Transactions

A. Forged or Falsified SPAs

If the principal never signed the SPA or the signature is forged:

The SPA is void;
Any deed of sale, mortgage, or other disposition of property signed by the “agent” relying on that forged SPA is likewise void as to the principal.
Even an innocent buyer in good faith cannot acquire better rights than what the “agent” had (which is none, in a forged authority situation).

For Torrens-titled property:

Registration of a void sale does not cure the nullity between real owner and fraudster, though it can raise complex issues of innocent purchaser for value and state indemnity.

B. Lack of Written Authority for Sale of Land

If the agent sells land without written authority:

The sale is void, not merely unenforceable, between principal and buyer, though:
- Third-party relations and notation on title may result in additional litigation.
The principal may ratify the transaction (expressly or impliedly), in which case:
- The previously unauthorized sale is treated as valid from the beginning as between principal and buyer.

C. Exceeding Authority

If the agent acts beyond the authority granted:

Example: SPA only authorizes leasing, but agent executes a sale; or SPA sets a minimum price which the agent disregards.

Consequences:

As a rule, the principal is not bound beyond what was authorized;
However, the principal may ratify the unauthorized act;
If the principal benefits from the transaction and does not repudiate despite knowledge, courts may infer tacit ratification.

Ratification retroacts to the moment of the transaction, curing many defects in authority as between principal and third party.

VIII. Special Contexts: Married Couples, Co-Owners, and Corporations

A. Conjugal / Absolute Community Property

For spouses:

Under the Family Code, disposition or encumbrance of conjugal or community property generally requires consent of both spouses.
If one spouse is abroad or unavailable, the other may act under an SPA, or obtain court authorization in case of unjustified refusal or incapacity.

Common scenario:

Wife in the Philippines sells property co-owned with husband working abroad. Husband issues an SPA authorizing the wife to sell in both of their names.

Without proper consent or SPA:

The transaction may be void or voidable depending on circumstances, especially if one spouse has not consented or has not been properly represented.

B. Co-Ownership

In co-owned property:

Each co-owner can sell only his undivided ideal share without the consent of others.
To sell the entire property, the seller must have:
- Written consent/SPAs from all co-owners; or
- A court order in certain partition scenarios.

An SPA from co-owners must clearly indicate:

The co-owner-principals;
The agent;
Authority to dispose of the entire property or specific undivided shares.

C. Corporations

For property owned by a corporation:

Authority is usually given by the Board of Directors, not by a simple SPA of an officer in his personal capacity.
In practice:
- A Board Resolution authorizes certain officers to sign;
- A Secretary’s Certificate and/or corporate SPA is presented to buyers and Register of Deeds.

Validity issues arise when:

The officer signs a Deed of Sale or Mortgage without proper board authority;
The board resolution is defective or absent.

IX. SPAs for Specific Types of Property Acts

A. Sale

Must be specific: “to sell” a described parcel of land;
Should specify whether:
- Cash sale;
- Installment or financing;
- Minimum acceptable price.
The buyer and Register of Deeds will rely heavily on the wording.

B. Real Estate Mortgage

SPA must authorize constitution of a mortgage over described property;
Ideally indicates maximum principal, interest, and loan purpose;
Banks are strict: they typically require notarized and often consularized/apostilled SPAs, plus internal form templates.

C. Lease

For leases exceeding one year, or creating a real right of lease, special authority is advisable;
SPA should specify:
- Maximum lease term;
- Rental range;
- Authority to receive deposits/advance rentals;
- Authority to renew or terminate.

D. Donation

Donation of immovable property is subject to strict formal requirements;
SPA must explicitly authorize donation and, in practice, must often describe the donee and terms;
Courts generally interpret donation powers narrowly.

X. Practical Considerations and Risk Management

For principals:

Draft SPAs clearly and narrowly tailored to the actual transaction;
Avoid overly broad language that might be abused;
Specify limits (price, terms);
Keep track of all SPAs issued and revoke in writing those no longer needed.

For agents:

Act strictly within the SPA’s scope;
Keep copies of the SPA and supporting IDs;
Disclose limitations honestly to buyers and third parties;
Avoid self-dealing (buying the property for oneself) unless the SPA clearly allows this and it is lawful.

For buyers and lenders:

Always demand to see the original notarized SPA and verify identity of the principal and agent;
Check that:
- The SPA explicitly authorizes the exact transaction;
- The property is accurately described;
- The SPA has not been revoked or superseded (ask for recent documents or confirm with principal if possible);
For high-value property, seek legal due diligence before relying on an SPA.

XI. Synthesis

The validity of a Special Power of Attorney for property transactions in the Philippines hinges on:

Substantive agency requirements (consent, capacity, object, cause);
Special nature of authority for acts of dominion over immovable property;
Form requirements – written authority, and in practice, notarization as a public document;
Specificity in describing the powers and the property;
Proper execution and authentication, especially when done abroad;
Continuing validity – no revocation, death, or other cause of extinguishment;
Compliance with special rules on conjugal property, co-ownership, and corporate authority;
Freedom from defects such as forgery, lack of written authority where required, or acts beyond the SPA’s scope.

A properly drafted and executed SPA allows property transactions to proceed even when the principal cannot be physically present. A defective SPA, however, can render entire transactions void, expose parties to litigation, and jeopardize property rights. Careful drafting, strict observance of legal formalities, and prudent verification by all parties are therefore indispensable in Philippine real estate practice.